Interfin Bank to be liquidated

The central bank yesterday said it will not extend the curatorship of troubled Interfin Bank, paving way for its liquidation after potential investors failed to inject fresh capital into the bank.

RBZ had given a potential investor, who was seeking to inject $50 million in the bank, up to December 24 to show a strong commitment in bailing out the troubled financial institution whose curatorship expired at the close of business yesterday.

Interfin, one of the financial institutions that collapsed when the multi-currency regime was introduced in 2009, has been under the management of a curator for past two and half years with the hope of finding investors to shore up the bank.

Interfin chairman Tim Chiganze recently told an extraordinary general meeting that in September this year, the central bank had written to curator Peter Bailey recommending that the bank surrender its operating licence after struggling to court new investors.

He said two investors were still keen to invest in the bank but according to RBZ the deal had not materialised.

“There were various initiatives and attempts to resuscitate the banking institution by the curator. A total of 12 potential investors were considered. However, none of the proposals  put forward yielded any positive results and the institution’s condition continued to deteriorate in the absence of concrete recapitalisation plans,” said the central bank in a statement.

It added that it had  applied to the High Court to liquidate the bank.

“The Reserve Bank determined that it was no longer feasible to resuscitate the banking  institution as a viable concern as all efforts to re-capitalise the banking institution have yielded no positive results and any further extension of curatorship would only further prejudice depositors and creditors,” it said.

The bank, has been struggling to recover debts which it attributed to the current liquidity crunch, resulting in it being unable to accumulate enough cash resources to meet its operating expenses.

As at November, Interfin had a negative net position of $166 million.- The Source

(366 VIEWS)